Forum member Adam Salzer OAM reports on the readiness of boards and especially Chairs of companies to truly transform their businesses.
The Australian Transformation and Turnaround Association (AusTTA) has conducted extensive research into what are the Best Practices at Board level that are required
to lead a complex organisation fundamental Transformation.
Data gathering included surveys via AusTTa Members, 5 round-table thinktanks with Australian CEOs, Boards and Chairs, a meta-analysis review of articles and journals including academic studies and 50 peer interviews.
Results and Insights included:
• Successful Transformation can only exist where there is proven Transformational Expertise in the Chair, Board and CEO – if any one of these is Operational rather than Transformational – the organizational Transformation will fail.
• Chairs and Boards recognise the need for qualified Transformational Expertise at C-suite level, but undervalue its importance at Board level.
• Australian leadership is struggling to understand how to identify what a Transformational Leader is and where, when and how to bring these capabilities into their organisation.
• Boards’ heavy focus on short term deliverables for shareholder returns is short changing future generations. The solution is to implement a public, transparent Transformational Strategy and to develop more relevant risk
profiles for the organisations.
• Australian Leadership lags behind global peers in terms of understanding and implementing Transformational Leadership and Strategies. There is a noticeable lack of urgency when Chairs and Boards compare their organisations to peers in USA, Europe and Asia.
• Asset Owners and their investment managers through demanding public transformational strategies from Australian listed companies, could identify opportunities currently unseen.
Boards are required to ensure their organisations do not fail, however, they are struggling to adapt to the pace of change in technologies, science and evolving business models.
As the Banking Royal Commission is demonstrating, and as is reinforced by the corporate and government leaders who participated in this research:
▪ Technology and science developments are changing how we live, work, consume and conduct business
▪ Consumers via social media demanding change to deliver personalized services at unprecedented speeds
▪ Business models with very different collaboration structures are emerging to disrupt existing organisations
These advances are so quick that organisations are no longer able to keep up, or even predict what their own market is going to look like in a few years’ time.
Leaders of companies and government departments find themselves challenged in terms of understanding, comprehending, preparing and resourcing themselves in readiness for this increased uncertainty.
The overwhelming consensus emerging form this research is that there needs to be a major rethink of the role of the Chair in leading their organisations into this Transformative journey.
Chairs need to become more active. The Chair needs to be a Transformational Leader or appoint and empower a Transformational Leader to advise the organisation they lead through the challenging (and painful) process of organisational Transformation.
A Transformational Leader will prepare the organisation for significant reinvention and for situations that are difficult to predict.
An experienced Transformational Leader provides organisations with the restructuring knowledge and tools to be able to reinvent themselves with urgency, creating open space for improved critical thinking and analysis, and leading the organisation via considered, intelligent, intellectual design backed by thorough research and supported by qualified
practising peer networks.
It is up to the Chair to recognise what skills make a Transformational Leader, to understand what a Transformation Strategy could bring to their organisation and to identify when their own leadership team does not have the necessary skills to facilitate this.
AusTTA’s research has identified that organisations focus on hiring excellent Operational
capabilities into the positions of Chair or CEO, and do not prioritise skills in transformation.
It is the Chair’s responsibility to lead change (or by engaging an advisor who is skilled in transformation).
Operational excellence is insufficient for the challenges ahead.
A Chair’s decision to act will determine the organisation’s mid to long term success or failure. It is difficult to transform large complex organisations, and especially difficult for organisations that are performing well.
Our research has found that Chairs and Boards with the hands-on engagement in this transformational journey are most capable of making the courageous decisions required and best able to manage the multiple internal and external stakeholders.
Those organisations starting to engage with the reinvention process have a Transformational Chair leading the Board.
Alternatively, if the Chair is not Transformationally experienced themselves, then they have recognised this and appointed an advisor to the Board and a CEO with a Transformational mindset and track record.
Adam Salzer is Chair of the Australian Transformation and Turnaround Association (AusTTA), the professional body of 2,000 transformational executives.
In a long career in consulting in Australia and Asia, he has led complex assignments involving up to 200,000 staff – Implementing new business models, efficiency and effectiveness upgrades, start-up & post-start-up, close-down & rightsizing, facility relocation, pre/post M&A, revitalisation, culture change and market entry.
Picture: Adam Salzer
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